GERMANY - The economic environment of Surteco Group SE - the holding company of leading national and international brands for surface technology - slowed significantly during the third quarter.

Even so, the Group reported an increase in sales of 3 % to € 534.2 million in the first nine months of 2018 (9M-2017: € 516.4 million) on account of the sales contributions from the Probos Group acquired in June 2017. On account of continuing high cost of materials, which can only be partly passed on, EBITDA increased mildly by 0.2% to € 62.2 million (9M 2017: € 62.1 million). Consolidated net profit grew from € 18.4 million to € 19.3 million after three quarters thanks to an improved financial result.

In view of the ongoing difficult framework conditions, the Group once more needed to correct the sales and earnings targets for the entire year 2018. Group sales are now projected to be between € 685 and € 695 million and EBIT is likely to range between € 37 and € 39 million.

Since the next business year looks set to witness continued weak demand alongside high raw materials costs, the company has launched an optimization programme. This includes the adjustments for processes and structures in the Group to meet the market-related changes. One-off expenses of approximately € 7 million are likely to be incurred for this programme. After they have been worked out in detail, they will be set aside as provisions in the fourth quarter and will form an additional burden for the result in 2018.

“Unfortunately, we have been compelled to correct our forecasts for the year 2018 further downwards in view of the continued weakening of the economic sector particularly in our European core markets and owing to sustained high raw material costs. We have responded at an early stage by launching an optimization program so that we can continue to grow profitably in the future,” stated Dr. Herbert Müller, Chairman of the Board of Management of Surteco Group SE, in commenting on the development.